The Basic Difference Between a First-Stage Cost Allocation and a Second-Stage

question 72

Multiple Choice

The basic difference between a first-stage cost allocation and a second-stage cost allocation is that:

• A) cost pools are not used in first-stage cost allocations.
• B) predetermined overhead rates are used in first-stage cost allocations but not in second-stage cost allocations.
• C) the first stage prohibits firms from aligning the allocation of costs with the use of resources.
• D) when used in an ABC system, the first stage assigns costs to activities.

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Definitions:

Medical Decision Making

The process by which healthcare professionals arrive at a diagnosis or treatment plan based on patient information, clinical evidence, and professional judgment.

Vaccine Injection

The administration of a vaccine through a needle introduced into the body to stimulate an individual's immune system against disease.

Procedure Codes

Numeric or alphanumeric codes used to identify specific health care services for billing and documentation.

HCPCS Level II

A standardized coding system used in the United States to classify healthcare services, supplies, and procedures not covered by the standard medical coding system.